Rapaport Magazine

Namdeb Plans Exploration Investment

Mining News

By Rapaport
BHP Billiton Production Falls

BHP Billiton Inc. reported a 5 percent drop in diamond production to 864,000 carats for its fourth quarter ended June 30, 2008. For the fiscal year, however, diamond production rose 4 percent to 3.4 million carats. Fourth-quarter production rose 39 percent compared to the third quarter due to a record volume of ore processed at Ekati. For the fiscal year, Ekati processed a greater proportion of higher-value carats from both the Koala and Panda underground mines. Ekati produced 31 percent more rough diamonds, or 1.9 million carats, during the fiscal first half. Production during the second quarter fell 10 percent to 843,000 carats.

Namdeb Plans Exploration Investment

Namdeb, the joint venture between De Beers and Namibia, is planning to spend $99 million (NAD 750 million) on new diamond exploration projects on the Namibian coast, according to The Namibian. Hilifa Mbako, Namdeb’s group external affairs manager, told the newspaper that the deposit was estimated to have the potential to deliver 500,000 carats per year and that Namdeb’s investment could rise to $528 million (NAD 4 billion) over the life of the projects, should they prove viable.

Petra Acquires Cullinan Mine

The Petra Diamonds Cullinan Consortium (PDCC) completed its acquisition of the famed Cullinan diamond mine from De Beers. PDCC agreed to buy the mine, which produced the world’s largest rough diamond, from De Beers in November 2007 for $132 million (ZAR 1 billion) and has since pursued the regulatory approval necessary to close the deal. PDCC expects the mine to produce 700,000 to 850,000 carats of diamonds in its first year and to increase to 1 million carats a year from 2009 to 2010. The company stated that annual revenues from the mine should reach $100 million. Petra will operate the mine and has the option of raising its stake in PDCC from 37 percent to 60 percent.

Rockwell Sale Nets Nearly $7 Million

Rockwell Diamonds Inc. sold 2,672.92 carats for $6.9 million at its sale completed June 30, the company’s fifth this year. Prices for large, 10-carat-plus stones of good color were particularly strong at $34,650 per carat for a 69.59-carat stone and $23,594 per carat for a 20.98-carat stone. Rockwell offered 16 stones in the range of 10 to 20 carats, five stones of 21 to 30 carats, one of 50 to 60 carats and one in the range of 60 to 70 carats.

Rio Tinto Halts Investment in Zimbabwe

One week after Gordon Brown, Britain’s prime minister, urged companies to review their current projects in Zimbabwe in response to the violence surrounding its presidential election, Rio Tinto announced that it ceased investment in its Murowa mine and will wait until the political climate improves. Opposition leader Morgan Tsvangirai withdrew from the runoff presidential poll after approximately 86 of his supporters were killed. Incumbent president Robert Mugabe easily won the uncontested vote. Rio Tinto holds a 78 percent stake in the Murowa alluvial mine, with Zimbabwean-owned RioZim holding the remainder.

Cream Minerals Progresses in Sierra Leone

Cream Minerals exported a parcel of diamonds to Canada that contained 112 stones weighing a total of 53.93 carats. The Government Gold and Diamond Office (GGDO) of Sierra Leone valued the parcel at $10,701, with a 6 percent royalty payable to Sierra Leone. The independent valuation indicated an average value of $198 per carat for the parcel, including one 2.92-carat stone valued at $1,071 per carat. This compares favorably with the average values reported by the Ekati and Diavik mines in Canada — $140 per carat and $104 per carat, respectively. Cream Minerals has also filed a request with the Mines Department to include gold in the permitted minerals listed in its diamond exploration license agreement.

Article from the Rapaport Magazine - August 2008. To subscribe click here.

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